The New Law on Enforcement Proceedings: What You Need to Know

On 23 April, Law of Ukraine No. 4833-IX was published, aimed at comprehensively improving the system of enforcing court decisions.

This law, which concerns both the Law of Ukraine "On Enforcement Proceedings" and 11 other legal acts, provides for the following changes (some of which have already come into force, while others will take effect on 23 October this year):

statements of claim for debt recovery must obligatorily contain the claimant's bank account details and documents confirming the existence of such an account (however, individuals who choose another method of receiving funds are exempt from this obligation); the restrictions established by the Law "On Road Traffic" for owners of vehicles listed in the Unified Register of Debtors do not apply if the re-registration is carried out as a result of enforced recovery against the vehicle or not for its disposal; the Law "On Notaries" prohibits notarial acts concerning the pledge (mortgage) of property whose owner is listed in the Unified Register of Debtors (previously the prohibition concerned only disposal); the Law "On State Registration of Real Property Rights and Their Encumbrances" prohibits the registration of a mortgage of property whose owner is listed in the Unified Register of Debtors; at the same time, it is now not prohibited, with certain reservations, to register ownership of mortgaged property of a person if they were listed in the Unified Register of Debtors after the mortgage was registered; state/private enforcement officers have been given the ability to request information from pledgee banks about debtors' indebtedness under pledge-secured obligations; the possibility of enforcing a decision at the debtor's place of work has been introduced; after the writ of execution is returned to the claimant, the claimant no longer files a new application to open enforcement proceedings but files an application to resume enforcement proceedings, which the debtor may also do (Article 37-1); automation has been implemented for the removal of all restrictions on the debtor through a notice of repayment of debt under enforcement proceedings, but only for recoveries not exceeding 10 minimum wages (Article 39-1); the accumulation of alimony arrears over three months results in the debtor being entered into the Unified Register of Debtors; appeals against rulings of a state enforcement officer on recovery of the enforcement fee, and rulings of a private enforcement officer on recovery of the main remuneration, enforcement costs and fines, must be made to the court that issued the writ of execution, rather than solely within administrative jurisdiction (amendments to part 1 of Article 74); during martial law and for one year after its cancellation, a moratorium has been introduced, with certain reservations, on the recovery against the sole housing of military personnel (paras 10-13 of the Final and Transitional Provisions).

The listed changes are not exhaustive, as significant amendments were also made to Article 8 "Automated Enforcement Proceedings System" and Article 9 "Unified Register of Debtors", while Articles 48, 56 and 62-1 of the Law "On Enforcement Proceedings" have been fully set out in a new wording.

Although only the practical application of these changes by enforcement officers and courts will show their effectiveness, even some of them can already make the work easier for both enforcement officers and participants in enforcement proceedings (the mandatory inclusion of a bank account number in claims, the existence of only one enforcement proceeding per writ of execution, and the automated removal of encumbrances when the debt is fully repaid from the debtor's funds).